Thursday, August 23, 2007

How does market growth affect the efficiency of copyright? I earlier argued that, holding all else equal, the low marginal cost of reproducing expressive works ensures that a larger audience will tend to reward copyright owners with larger profits. Population increases thus threaten to throw copyright policy out of balance, making the costs of its restrictions outweigh the benefits of its incentives. I'd here like to air a related but distinctly different argument: Holding all else equal, an increase in population, because it brings an increase in the number of authors motivated by non-pecuniary incentives, tends to render copyright less necessary.

Samuel Johnson claimed, ""No man but a blockhead ever wrote, except for money." He would doubtless have said the same about the other media—music, painting, motion pictures, computer software, and so forth—that copyright later came to cover. Regardless of how they express themselves, savvy authors demand remuneration for their creative labors. Copyright helps to ensure that they get it.

And, yet, "blockheaded" authors exist. Some percentage of authors will at least sometimes share their expressive works for very little or no pay. We need not specify what motivates such authors (though it is surely not fair to call them all "blockheads"). We need only observe that, as Johnson himself impliedly recognized, non-monetary incentives sometimes suffice to stimulate authorship.

It seems safe to assume that the percentage of expressive works created in response to non-monetary incentives does not materially decrease as population increases. Why, after all, would greater company deaden an artist's response to the love of his craft, or the lure of fame, or simple generosity? More likely than not, the number of his neighbors has no bearing on how sharply an author feels non-monetary spurs (unless to make celebrity all the more appealing).

So understood, the "more 'blockheaded' authors" factor tends to make copyright less efficient as population increases. In a small population, we may find that non-monetary incentives do not stimulate enough expressive works. Copyright, by helping to ensure that authors get paid, can help to remedy that market failure. As population grows, however, so does the number of authors for whom copyright proves an unnecessarily strong motivation. Thanks to the low marginal cost of reproducing expressive works, moreover, those "blockheaded" authors can satisfy an increasing percentage of consumer demand. At some limit, for instance, a single warm-hearted genius might supply all the world's demand for samba music free of charge.

The reasoning here thus runs in parallel with that I set forth earlier, concerning the effect of growth in the population of consumers. Whereas we there saw why copyrights become more profitable as the number of consumers increases, however, we here see why copyright's profits matter less as the number of producers increases: Because non-monetary incentives should eventually stimulate enough authorship to satisfy the demand for expressive works. At that point, copyright would prove utterly superfluous. Well before that point, it would prove inefficient.

But if Samba diversity drops below what the market demands, Ran, it would doubtless respond. I take the "holding all else equal" proviso to here simply require that we assume that the per capita demand for new Samba doesn't change with population growth.